Goodyear, one of the world's biggest tyre producers, is set to move its Asia-Pacific headquarters from the United States to Shanghai during the second quarter of this year.

The US-based company also expects a 10-fold increase in its annual procurement from China by 2010.

These plans were announced by Robert Keegan, chairman and chief executive officer of Goodyear last Friday in Shanghai.

The objectives of the expected relocation of Goodyear's Asia-Pacific headquarters are to "drive growth and procurement, get close to the marketplace and customers, and attract and develop strong local talent in China, and provide renewed impetus to Asian growth," Keegan said.

"As the only tyre company with production in 10 Asian countries, we believe that over the next few years, Asia and particularly China will be a critical growth engine for Goodyear," he said.

Goodyear's Asia-Pacific regional sales reached US$1.3 billion last year, up from US$581 million in 2003.

Its tyre production in the Asia-Pacific region climbed to 19.5 million units last year from 13.4 million units in 2003.

"Goodyear already procures 1 per cent of its total from China. We want to increase this figure by 10 times...by 2010," Keegan said.

The company's procurement from China will be worth US$800 million by then, he said.

"We believe that China is capable of producing high quality products in large quantities to meet our global requirements," he said.

A number of Chinese suppliers have many "unrealized advantages" that Goodyear can help them achieve, such as improved operational management, better logistics and planning, he added.

The company has a joint venture in Dalian in the northeastern Liaoning Province. Annual production capacity there will reach 5.3 million tyres during the first quarter of 2007 with an extra investment of US$120 million.

It also controls a 60 per cent stake in a US$20 million auto air-conditioning hose joint venture in Qingdao, Shandong Province.

"Goodyear is currently seeking opportunities to create a joint venture (in China) to produce high quality conveyor belts for industrial use," Keegan said, without elaborating.

Other world tyre giants are also speeding up expansion in China's booming tyre market.

France's Michelin plans to invest hundreds of millions of US dollars to build its joint venture in Shanghai into its largest tyre manufacturing base in the world.

Bridgestone of Japan will enhance annual production capacity at its plants in northern Tianjin Municipality to more than 5 million tyres.

Yokohama, another Japanese producer, plans to add an investment of US$200 million within the next five years in China to expand its existing plant in Hangzhou, capital of Zhejiang Province, and to build a new plant in Guangdong Province.

Source: China Daily